Assignment1

1. What is the impact on new housing investment, if there is a decrease in real interest rates?

2. What is the impact on the loanable funds market, if the quantity of loanable funds supplied is more than the quantity demanded?

3. Sri Lanka is a miskeen country. What is the impact on the market for foreign-currency exchange in Sri Lanka, if Sri Lanka started to export more tea?

4. What is the relationship between loanable funds market and market for foreign-currency exchange?

5. Is budget surplus good for an economy?

6. Using graphs, explain the implication of an economy’s budget surplus on the real exchange rate.

7. Define economic recession. Discuss the variables that are likely to change as a result of economic recession? Do the variables have similar pattern of change? Explain your answer.

8. Discuss variables that can change the aggregate demand curve and their direction of change.

9. Discuss business cycles? Why the business cycle curve is upward trending?

10. What is sticky wage theory? How sticky wage theory is related to supply curve?

Assignment2

1. What is money supply and how it is related to inflation?

2. What is the relationship between classical dichotomy and monetary neutrality?

3. What is hyperinflation? List a country that has experienced hyperinflation more recently?

4. How the nominal interest rate and inflation rate are related.

5. List three costs to the society that results from the inflation

6. Giving reasons, explain what has happened to Kuwait's net export as the result of Coronavirus pandemic?

7. Giving reasons, explain what has happened to Kuwait's how net capital outflow as the result of Coronavirus pandemic?

8. What is the nature of the relationship between saving, domestic investment, and net capital outflow?

9. How nominal exchange rate is different from real exchange rate?

10. What is the relationship between purchasing-power parity and exchange rates?

Assignment1 1. What is the impact on new housing investment, if...